If you mean Swann, no, he robbed us via the Otago District Health Board . Coincidentally another of his hidden cars has just turned up.

While cars are common to both frauds I don’t think DCC cars would have been up to Swann’s taste.

When the DCC car fraud story first broke it was reported as being a few hundred thousand dollars worth. Next we heard it had gone up to a million. Now it’s $1.5 million. That’s about $10k per car, that’s a lot on average to disappear off the asset register.

Callum

“Auditors can’t and are not expected to pick everything up, but checking the fixed assets schedule against the actual assets is pretty routine.”
Except they weren’t there to check were they? This fraud was around the proceeds from the turnover of older/surplus vehicles.
Spread over 10 years, it would be very easy for the sale proceeds from 15 cars a year to disappear. No way an auditor could pick it up if there is collusion, depending on the number of cars turning over a year you would never find a material error. Auditors are there to audit the financial statements, not detect a minor fraud when looking at over $1 billion of assets.

Nookin

freedom101

Council’s are required to pay large sums to the Audit Office every year and the auditors crawl all over the organisation. What a waste of time and money when they can’t spot the obvious. It’s bureaucratic box ticking at its worst, and of course the ratepayer pays.

backster

Mobile Michael

He must have been depreciating the vehicles until they hit $0, then writing them off the register so as to not arouse suspicion from book losses. However, an auditor should have asked why so many cars on the register were being kept beyond the council’s policy for vehicle disposal without having to ask to see the physical vehicle asset.

burt

Tauhei Notts

Once upon a time that sort of oversight by auditors would have been unbelievable but now their approach seems to be once over lightly.
They are more likely to be all consumed with the unrealistic minuteae of the International Financial Reporting Standards and their unbelievable consequences; the complexity of which is incredible.
Once upon a time we had an accounting profession in our country. It has morphed into an accounting industry and as such professional standards have been replaced by the questionable actions of industrialists.
The external auditors, in an attempt to run for cover will blame the internal auditors. The internal auditors will blame the Council’s wish to spend money on each and every aspect of Treaty grievances, and sundry racist bullshit, thus leaving insufficient money available to pursue naughtiness.

Warren Murray

Im curious how it was done. The suggestion that the cars were depreciated to zero but sold for more seems simplistic, but maybe correct. That would be a terribly embarrassing flaw in the Council’s policies and processes, especially if it went on for so many years.

In my experience the usual approach is to have an assumed residual value of, say 20% at the end of the asset’s usual life. So, for cars that would mean 80% of the cost is depreciated over 5 years. Lets not forget that Councils buy at a price much lower, approx. 20- 30% less than retail.

Callum

‘Im curious how it was done. ‘
I would guess they simply fiddled the tender documents at sale time, either put a lower price in and pocket the difference or listed 6 cars sold instead of 4 then sell the other 2 separately. Could also have had an arrangement with a local dealer for something similar. Depending on the volume they were selling average selling price could still have looked reasonable and the number of vehicles would still be correct.

Buaidh No Bars

This is a Green based council which has been more focused on marking cycle lanes on our state highways between parked cars where drivers opened into the cycle lanes and heavy vehicles such as stock trucks on the other side, hence they are not good at making sensible decisions especially financial ones.

There ar two aspects to the auditors. The primary auditor is the govt auditor that missed the other fraud referred to in another post. Both are balance sheet audit issues. The second audit is the so called internal audit that often selects a particular aspect such as receivables, payables, wages, assets etc and explores the area selected for a full procedure review.

It it yet another failure of former NZICA as the it’s practice review of auditors.

A disturbing aspect is councillor Richard Thomson who was chairman of the ODHB when there was a 16.7m fraud. He was sacked as chairman but remains as an elected councillor. He is a councillor on the DCC. He signed of an increase in employee fraud insurance from $2m to $5m for the ODHB 28 days before that fraud was investigated. Needless to say the ODHB got no insurance claim payout.

This is the gentleman how is promoted by the editor of the ODT as a leading light.

Governance – suspect he has no idea what that means.

The DCC cars is the biggest joke in Dunedin for many years and surprises few I have spoken to.